Discover it® Secured review

30 October 2018

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This rare secured card comes with cash back rewards and the chance to upgrade to an unsecured card.

The basics

Typically, you get a secured credit card for one reason: to rebuild your credit. In that sense, the Discover it® Secured does its job. After you make a $200 deposit and start using your card, Discover will report your payment history to the three major credit bureaus. And to help out even more, the Discover it comes with no annual fee.

It’s the extras you receive, however, that set the card apart. You’ll get 2% cash back at gas stations and restaurants up to $1,000 each quarter, and 1% on all other purchases — a generous rewards rate for a secured card. Discover will also match all the cash back you’ve earned at the end of your first year.

Perhaps best of all, you have the opportunity to graduate to an unsecured card. After eight months, Discover will review your account. If they see you’ve been a responsible borrower, they’ll return your security deposit while you continue using your card. That’s an excellent offer you won’t find with other secured cards.

The perks

SIGNUP BONUS: Cash back match at the end of the first year.

At the end of your first year, Discover will match all of the cash back you’ve earned.

INTRO APR: For balance transfers.

Enjoy a
10.99% variable
intro APR for 6 months on balance transfers, starting from the date of your first transfer. After your intro APR expires, it’ll revert to 24.99% variable.

CASH BACK: More at restaurants and gas stations.

Earn 2% cash back at gas stations and restaurants on the first $1,000 in combined purchases each quarter (1% thereafter). Earn 1% cash back on everything else.

Credit reporting to the three major bureaus.

Discover will report your payment history to the three major credit bureaus (TransUnion, Equifax and Experian). With consistent on-time payments, you’ll build your credit score.

Possible security deposit return after eight months.

After eight months, Discover will review your account every month. If they deem you’ve been a responsible cardholder, they may return your security deposit while you continue using your card. This effectively turns your secured card into an unsecured card.

No annual fee.

You won’t pay an annual fee for the life of the card.

How much cash back rewards can I earn with the Discover it® Secured?

Where you spend:

The amount you spend:

Cash back earned:

Dining

$2,000

$40

Gas

$2,000

$40

Everything else

$6,000

$60

Total

$10,000

$140

For an annual spending similar to our example, you would earn $140 from the second year. For the first, you would earn $280 with the Discover cashback match.

You’ll also like

Security.

Discover will alert you if they find your Social Security number on a risky website. They’ll also alert you if any new accounts (credit cards, loans, etc.) are opened on your Experian credit report.

Use cash back at Amazon.com.

You can use your cash back directly at Amazon.com without having to redeem it first. Just link your Discover card account to your Amazon.com account.

Freeze It.

With Freeze It, you can prevent new purchases, balance transfers or cash advances on your credit card. This is helpful if your card is lost or stolen.

Free overnight shipping for card replacements.

If you lose your card, you can get a replacement the next day.

No penalty APR.

Your interest rate won’t go up if you pay late.

First late fee waived.

The first time you pay late, you won’t have to pay a fee. (On subsequent late payments, you may be assessed fees up to $37.)

No over-limit fee.

If you exceed your credit limit, you won’t be charged a fee.

No foreign transaction fees.

Use your card internationally without incurring fees.

Get your FICO score for free.

View your FICO score on each of your monthly credit card statements.

What to watch out for

Security deposit.

Before you can open the card, you must put down a security deposit of at least $200.

It hurts to pay late.

Your first late fee is waived, but making subsequent late or returned payments could result in fees as high as $37.

Expiration on intro balance transfer.

Time limit for balance transfers.

If you want to take advantage of the intro balance transfer APR, your transfers must post to your account within the first months.

Higher APR for cash advances.

Cash advances are subject to a high APR of 26.99% variable.

Fees for balance transfers and cash advances.

You’ll pay a fee of 3% of the balance transfer for each transfer. For each cash advance, you’ll pay the greater of $10 or 5% of the cash advance, whichever is greater.

How can I make this card’s high APR worth it?

Even though the Discover it® Secured is a good way to build credit if you use it responsibly, it does have a 24.99% Variable APR. To avoid paying this high APR on your purchases, try to pay off your monthly balance on time. After eight months of card ownership, your account will be reviewed by Discover to see if you can get your deposit back and upgrade to an unsecured version of this card.

I got the card. Now what?

Avoid fees. Your first late payment fee is waived. From the second late payment onward, you’ll pay up to $37 fee.

Customer service. If you have questions, call 1-800-347-2683 or chat with a representative online.

How do I redeem rewards from Discover it® Secured?

Log in to your online Discover Card account and choose a redemption option.

Gift cards with a $5 bonus on each card.

Pay at Amazon.com checkout with your cash back.

Donate to charity.

Deposit into your bank account or use toward your Discover card bill.

You don’t need to have an online account to redeem your cash back. Call 1-800-DISCOVER (1-800-347-2683) and redeem your rewards.

Bottom line

The main purpose of the Discover it® Secured is to help those who are trying to improve or build credit, so it is essential that you pay your monthly bill on time. Remember that your payments make up 35% of your credit score, so missing payments will have additional consequences.

Discover will review your account after eight months to see if you are eligible to have your deposit refunded and upgraded to an unsecured cards. It remains one of the best secured cards you’ll find on the market.

Frequently asked questions

If you pay your balance in full and close your secured account, Discover will refund your security deposit.

The major credit bureaus are TransUnion, Equifax and Experian. Most lenders use information from these bureaus to determine your reliability as a borrower.

Most of the time, your provider won’t pay interest on your security deposit.

Many secured-card providers will check your credit. For that reason, you may be declined if your credit score is too low. If you’re declined for a secured card, consider applying with a provider that doesn’t check your credit.

No, it will look like a regular credit card and is accepted anywhere that Discover is accepted.

You’ll need to notify Discover that your card has been lost or stolen, and a new card will be shipped to you overnight.

Adrienne Fuller leads the publishing team at finder.com. She has one goal: to deliver the accurate and transparent information she wishes she had when she made some of life's important financial decisions. When she's not helping folks save money, she's hiking with her two Catahoulas around her home in San Diego.

Questions and responses on finder.com are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.

4 Responses

Discover it Secured credit card requires a minimum credit score of 300 or higher. With a credit score of 478, you belong to the group of users with an average of 29% approval rate. Kindly note though that other eligibility criteria apply to be approved for this card.

Thanks for getting in touch with finder. I hope all is well with you. :)

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